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Problem:

Suppose your company imports computer motherboards from Singapore. The exchange rate is currently 1.2875 S$/US$. You have just placed an order for 27,000 motherboards at a cost to you of 237.50 Singapore dollars each. You will pay for the shipment when it arrives in 90 days. You can sell the motherboards for $200 each.

Required:

Question 1: What is your profit at the current exchange rate?

Question 2: What is your profit if the exchange rate goes up by 10 percent?

Question 3: What is your profit if the exchange rate goes down by 10 percent?

Question 4: What is the break-even exchange rate?

Question 5: What percentage rise or fall does this represent in terms of the Singapore dollar versus the U.S. dollar?

Note: Provide support for your rationale.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91163346

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